Winters of Discontent

Tom Tippett
February 4, 2002

Many history books are written some time after the events they chronicle, and that's a good thing, because the passage of time often puts things in perspective and enables some of the insiders to reveal thoughts and strategies that could not have been disclosed sooner.

For me, however, it is often more interesting to look at history through the newspapers and magazines that were covering those events as they were happening. These sources often reveal details, opinions, and uncertainties that have been forgotten by the time events have played out and the final outcome is known to all.

When I was in college, I enjoyed spending some of my free time in the library, going through old issues of Time magazine from the 1920s and 1930s. My interest then was in seeing how the writers of the day talked about world events before anyone knew that the Great Depression and World War II were about to unfold.

After college, I didn't have many opportunities to pursue this hobby, but that changed last summer when we began researching the 1978 to 1981 period so we could add those years to our collection of Diamond Mind Baseball past seasons. In addition to analyzing lots of play-by-play data from those seasons, we read books like the Bill James Historical Abstract and The Baseball Timeline. And we pored over old issues of the The Sporting News.

That exercise brought back memories of some well-known events, such as the famous 1978 pennant race in which the Yankees stormed back from a 14-1/2 game deficit to catch and pass the Red Sox, who gathered themselves and ran off eight consecutive wins to force a one-game playoff. (A game that led a generation of Boston fans to give Bucky Dent a new and unprintable middle name.) And an MVP race pitting Ron Guidry's 25-3 record and 1.74 ERA against Jim Rice's 406 total bases in a controversial debate about the relative importance of starting pitchers and everyday players.

And it told us things we had long forgotten or had never known in the first place. At some point, I hope to find the time to write about the interesting on-field events from this period, including a more detailed look at that Yankees / Red Sox race. But with all that's going on in baseball this winter, I found it even more interesting to read about the business of baseball in those days. If you choose to read on, I guarantee that some of these events will seem familiar in light of the headlines we've been reading since the end of the 2001 World Series.

So please join me as we take a little stroll through the past...

Bay Area baseball in trouble

In December, 1977, Oakland A's owner Charlie Finley agreed to sell the club for $12.5 million to Marvin Davis, a Denver multimillionaire who made his money in the oil business. Seems Finley was often late on his stadium rent payments and claimed to be stuck in a hopeless money-losing situation. (Oakland failed to draw 500,000 fans the year before.) The only obstacle to the move was a lawsuit filed by the Oakland Coliseum against Finley and the A's to enforce the team's lease.

But many believed this problem would be overcome, and pending the expected approval by the other owners, plans were set for the team to move to Denver in time for opening day. In The Sporting News, a long article about Mile High Stadium described many interesting aspects of the A's future home without once mentioning the effect of playing at altitude. Meanwhile, Denver fans discussed possible names for their new club and Oakland stadium officials floated the idea of having the San Francisco Giants split their games between Candlestick and the Coliseum.

Things didn't go as planned, however. Davis's deadline for resolving the stadium dispute arrived without a solution and Davis immediately pulled out. It looked like the deal was dead until Commissioner Bowie Kuhn, AL President Lee MacPhail, and several other owners prevailed upon Davis to "leave the door ajar" just a little longer so the Bay Area parties could work something out. Davis reluctantly agreed, but his doubts were confirmed when talks fell apart in early February, giving the Oakland front office less than two weeks to get ready for spring training and begin preparations for what many believed would be a lame-duck season.

Oakland fans had their team back, but the area was still under a dark cloud (or perhaps a very heavy fog). According to The Sporting News, San Francisco Mayor George Moscone "agreed that another year of two baseball teams in the Bay Area could mean death for both clubs." Finley claimed that former Giants owner Horace Stoneham had lost $7 million in six years. As a result, the Giants had been slated to move to Toronto two years earlier, before Bob Lurie and Bud Herseth stepped in at the eleventh hour to buy the team and keep them in the city.

But a few weeks after Finley's deal with Davis fell through, it was revealed that Moscone had written a letter to NL President Chub Feeney the day after Lurie and Herseth had purchased the team. The letter said that Moscone wouldn't stand in the way of the Giants leaving town after three years if the Lurie/Herseth purchase didn't prove to be a sound investment. That three-year period was due to expire after the 1978 season.

In March, Finley was negotiating with another potential buyer, with the price having been reduced to $10.5 million this time. The prospective owner, James Nederlander, reportedly said that there were enough people in the Bay Area to support two teams. When asked about cooperating with the A's, rather than fighting them, Lurie expressed a different view: "We would have to fight. Everybody in baseball agrees two teams can't survive here."

Amazingly enough, with spring training already underway, another attempt was made to resurrect the Davis deal. Kuhn, Finley and Lurie appeared before a San Francisco finance committee and claimed that the two clubs had lost a combined $4.4 million in the past two seasons. The Coliseum folks responded by saying that it was worth taking another look at the concept of moving the A's to Denver, having the NL team split its home schedule between the two parks, and changing the team name to Bay Area Giants. On March 12, less than a month before opening day, Lurie said these plans were only 48 hours from approval.

Like most predictions in this saga, this proved to be optimistic. Two weeks later, after the Coliseum had apparently agreed to receive a $3.25 million settlement to break the lease, Finley objected to some of the terms of the latest proposal. One major issue was his share of the $3.25 million payment. Davis claimed that Finley was given everything he asked for but pulled out anyway.

But it still wasn't over. Kuhn and MacPhail continued to negotiate with the Denver group, and in early April MacPhail said that a move during the season was not out of the question. Meanwhile, the season opened with many home games drawing fewer than 3,000 fans even though a hot start put the A's atop the standings with a 16-5 record on May 1st.

Amid all the uncertainty, Finley hadn't lined up a local radio contract, so he signed an interim deal with a student-run FM station that covered the first 16 games of the season. The station's signal was so weak that it could be heard only for a few miles. In fact, it didn't even reach the team's home park, so the handful of fans in the seats had no reason to bring their transistor radios. And the play-by-play was provided by a 21-year-old student named Larry Baer.

It took Finley another two years to unload the A's. Suffice it to say that both clubs are still in the Bay Area, Oakland has fielded more than a few entertaining and talented teams in the past 23 years, the Giants are riding a wave of popularity in a great new stadium, and Larry Baer is now Executive Vice President and Chief Operating Officer of the Giants.

Why can't we all get along? (part 1)

Four members of the Baltimore Orioles filed a grievance after the club refused to pay their contractually-stipulated bonuses. Seems the contract language said they were entitled to those bonuses if they each made a "significant contribution" to the team in 1977, and management deemed that the following performances failed to meet that test:

Ken Singleton -- .328 average, 24 homers, 99 RBI, third in MVP voting
Rudy May -- 18 wins, 3.62 ERA in 252 innings
Mike Flanagan -- 15 wins, 3.64 ERA in 235 innings
Jim Palmer -- 20-11, 2.91 ERA, and a league-leading 319 innings

In Palmer's case, the O's said that he would have had to win 22 games, post a 2.50 ERA, or win the Cy Young award to qualify for his extra pay. Two weeks later, the club relented and paid the bonus, but not before pointing out that the club had previously agreed to specific performance targets (like the Palmer ones just cited) that were detailed in letters sent to each player. Problem was, those side deals were illegal under baseball's rules, so the club was in hot water either way.

Why can't we all get along? (part 2)

The 1976 collective bargaining agreement called for the roster limit to remain at 25 active players and also specified a minimum of 24. If the roster size dropped below 24 because of trades or injuries, the club had 48 hours to add enough players to get back to the minimum. Or so the contract stated, at any rate. There were cases where a team dropped as low as 22 and stayed there for a while, though the player's association didn't make a stink about it.

That changed when every National League club chose to carry 24 players for the 1978 season, claiming they could save as much as $150,000 per year in salary, travel and other expenses. That figure is clearly bogus -- back then, the 25th man was often making the minimum salary of $21,000 -- but the clubs did it anyway. Needless to say, the union filed a grievance on the basis that this act of collusion represented a unilateral change to the rules by effectively reducing the maximum to 24.

This practice was short-lived. The AL had stayed at 25 from the beginning, and many NL teams were back at the 25-man limit by the middle of the season.

Why can't we all get along? (part 3)

It was common in those days for teams to sell a variety of memorabilia -- team yearbooks, glasses, mugs, and the like -- featuring pictures of the players. The players weren't happy about the teams using their likenesses without compensation, but there was no major confrontation over this issue until the 1978 Yankees yearbook included a pullout with 27 baseball cards featuring player photos. That act, the players complained, violated their rights and their exclusive contract with Topps for the production of baseball cards. The dispute was resolved when the Yankees acquired a license from the players association.

Why can't we all get along? (part 4)

Two years before the collective bargaining agreement was due to expire, the two sides were engaged in a war of words. George Steinbrenner vowed that the owners would be better prepared for the negotiations than ever before and said they'd be willing to hold out through a long strike. Several other owners and GMs argued that changes (meaning concessions by the players) would be necessary for the survival of the game. Charlie Finley said the number of teams could shrink from 26 to 20.

On the other side, player's association executive director Marvin Miller argued that clubs were engaging in dirty tricks (citing the Phillies front office for releasing confidential salary data and blaming the leak on the players), harassing younger players, and punishing veterans with free agency rights (Finley ordered Bill North to be benched when he said he would be playing out his option).

As it turned out, the new deal expired without a new one in place. The early part of the 1980 season was played under the threat of an imminent strike or lockout before the parties agreed to finish that season under the old deal. The same threat hung over the beginning of the 1981 season, but this time the players ran out of patience and walked out on June 10th. Two months later, an agreement was reached, just in time to save the season, albeit one with a controversy over split standings and an extra round of playoffs.

Going global

As 1977 turned into 1978, there was much speculation about how a sensational Japanese hitter might fare in the big leagues. Davey Johnson, former Orioles 2B and a teammate of Sadaharu Oh during a two-year stint in Japan, opined that Oh could have hit 700 homers in the majors. Most pundits were quick to dismiss that claim, asserting that Oh's numbers were inflated by mediocre Japanese pitchers and small parks. Twenty-three years later, Ichiro Suzuki has adapted very quickly to the North American game. Does that mean Oh could have done the same in the '70s? We'll never know.

Major League Baseball announced that it had signed a deal worth over a million dollars with networks that would televise thirty games in Japan. The deal included weekly highlight shows, World Series games, and the ABC Monday night games. (Remember those? "This is Howard Cosell ... I know absolutely nothing about baseball, but I'm still the most important man in sports.")

Going broke in Minnesota ... sort of

Free agency was robbing the Minnesota Twins of its top talent as management refused to cough up enough money to keep relief ace Bill Campbell and top hitters Lyman Bostock and Larry Hisle. Then there were reports that Rod Carew would be leaving for greener pastures when his current contract expired. Adding to the angst of the local fans, they learned that the club turned an after-tax profit of $800,000 in 1977 but chose to pay dividends to shareholders rather than invest some of that surplus to retain the players that had helped them draw a million fans for the first time in seven years.

Going broke in Chicago ... sort of

Before they were bought by the Chicago Tribune, the Cubs held annual shareholders meetings and published its financial statements. It's interesting to note that their revenues rose from $5.3 million in 1976 to just under $8 million in 1977. That's a jump of about 50% in one year. Nevertheless, the team managed to lose money in both years even though they were in the bottom half of the team payroll rankings.

How do you add $2.6 million in revenue in one year and still lose money? Well, you spend it, of course. The team's "direct expenses of baseball operations" rose by $1.7 million in one season. Rapidly rising payroll due to the onset of free agency? Yes, in part, but the team's total 1977 payroll was only $1.7 million, and if that payroll was rising at the league-average rate, the increase from the year before would have been about $600,000. So there's another $1.1 million in increased spending that cannot be attributed to skyrocketing salaries.

The bottom line is that about two-thirds of the new revenue was spent and the remainder used to reduce losses from almost a million bucks in 1976 to about $150,000 in 1977.

Going broke in California ... sort of

The Angels reportedly lost $400,000 in 1977 despite seeing their home attendance rise from a million to a million-four. We don't know what their average ticket price was at that time -- in most parks, box seats went for $5-6 and bleacher seats for a buck or two -- but if the average was $3, the increase in gate receipts would have been about $1.3 million. Local TV and radio receipts were the same as the year before. The loss was blamed on the rapid rise in player salaries, but as we've seen with the Cubs, that's not enough to wipe out such a large spike in revenue.

Payrolls

The Sporting News published a table showing the total payroll for each team based on their 25-man rosters as of August 31, 1977. Believe it or not, the Phillies were at the top, just a hair ahead of the Yankees. The #3 through #11 teams were Cincinnati, Pittsburgh, Los Angeles, California, Kansas City, San Francisco, Texas, Boston and San Diego, in that order. The two Chicago teams were 14th and 18th and the Mets were 19th. (Tell me again ... which are the small market teams?) The Phillies total payroll was $3.5 million, just enough to buy one decent setup man today. The average salary at the time was $76,349.

Fourteen prominent players changed addresses via free agency during this, the second winter of the free agency era, signing deals whose average annual salaries ranged from Larry Hisle's $525,833 to Bruce Bochte's $126,000. Other notables who changed addresses were Oscar Gamble, Rich Gossage, Mike Torrez, and Dave Kingman.

In the face of rising salaries, sixteen clubs announced increases in ticket prices for the coming season. For example, fans would have to pay $4.50 for the best seat at a Dodger game, with general admission tickets rising to $2 (children got in for $1) and parking going up by 50 cents to $2. The Pirates and Phillies both set their top ticket at $6.

Ownership

Commissioner Kuhn announced in early April, 1978, that the Indians and Yankees would not be permitted to complete any deals between the two clubs. The reason? Steve O'Neill had purchased the Indians and convinced Gabe Paul to leave the Yankees and become president of the Cleveland franchise. Both O'Neill and Paul were still part owners of the Yankees, and Kuhn didn't want anything fishy going on until the two men had sold their Yankee stock.

A number of franchises changed hands in the 1978 to 1982 period:

May, 1978 -- the American League approved the sale of the Red Sox for a reported $20.5 million
January, 1980 -- the Mets were sold for a little over $21 million
August, 1980 -- Charlie Finley finally sold the A's, with a group of Levi Strauss executives paying $12.7 million for the team
January, 1981 -- George Argyros bought 80% of the Mariners for $10.4 million
June, 1981 -- the Chicago Tribune paid $20.5 million for the Cubs, a price that included Wrigley Field
October, 1981 -- the Phillies were sold for $30.2 million

The Commish

A small group of disgruntled owners reportedly launched a bid to oust commissioner Bowie Kuhn. His offense? Meddling in their affairs -- by fining several owners for tampering and vetoing a proposed deal that would have sent Vida Blue to Cincinnati for $1.75 million -- through his use of the "best interests of baseball" provision. The rebellion was quickly put down when a majority of the owners signed a declaration of support for Kuhn.

Going broke throughout baseball ... maybe

Attendance in 1977 was a record 19.6 million in the AL and 19.1 million in the NL (for 14 and 12 teams respectively). Twenty years earlier, it was 14 million for the two leagues combined (16 teams). Attendance records were also being set for spring training games.

National television and radio revenue was $23.3 million per year and would stay at that level until the expiration of the four-year deal that was signed in 1976. The fact that these revenues were not growing was a problem for ownership in the face of rising salaries. Local TV and radio deals provided another $29.2 in revenue in 1978, up slightly from the year before. (The Yankees will take in more money from local television and radio in 2002 than all of baseball received from both national and local contracts in 1978.)

When Commissioner Kuhn claimed that baseball lost $25 million in 1980, Players Association head Marvin Miller dismissed the assertion, saying "we don't even know how they arrive at what is a loss or profit." Paul Beeston, then Vice President of Business Operations for the Blue Jays, lent credence to Miller's view when he said:

"Anyone who quotes profits of a baseball club is missing the point. Under generally accepted accounting principles, I can turn a $4 million profit into a $2 million loss, and I can get every national accounting firm to agree with me."

Was baseball really losing money? Almost certainly not. In his book Baseball and Billions, economist Andrew Zimbalist described many of those accounting tricks, and showed that the clubs were earning substantial operating profits during that period.

Does all this sound vaguely familiar?

It's clear that many of this winter's themes -- contraction, relocation, interlocking ownership, squabbling between owners and players, claims of widespread losses -- are not new. It wouldn't be accurate to say that every winter has had as much of this off-field news as we've seen this year or in 1977-78, but many of the basic themes are the same.

The good news is that the turmoil of the seventies wasn't a major drag on the game itself. We still had that great Yankees / Red Sox race in 1978, a classic World Series between the "we are family" Pirates and the favored Orioles in 1979, George Brett's run at .400 in 1980, and lots, lots more. Some of the rookies from that era are now in the Hall of Fame, and many others fill the coaching, managing and GM ranks today.

Let's hope that the owners and players can figure out a way to get a new labor deal in place without any disruption, the Montreal situation can be resolved without contraction, and the issues of the past three months are a distant memory come September. It's happened before.